A-Level经济例题解析及练习A monopoly’s revenue

今日知识点：A monopoly’s revenue

例题

Question: A monopoly’s revenue

Common Grounds is the only seller of cappuccinos in town. The table shows the market demand for cappuccinos.  

Fill in the missing spaces of the table. What is the relation between P and AR?  Between P and MR?

解析

下面我们为大家准备了一道同类型的题目，请大家一起来试试解答。

Question: Monopoly vs. Generic Drugs

      

Patents on new drugs give a temporary monopoly to the seller.  When the patent expires, the market becomes competitive, generics appear.

What is the welfare cost of monopoly?

Correct Answer：

Recall:  In a competitive market equilibrium, P = MC and total surplus is maximized. 

In the monopoly eq’m, P > MR = MC; the value to buyers of an additional unit (P) exceeds the cost of the resources needed to produce that unit (MC). 

The monopoly Q is too low – could increase total surplus with a larger Q. 

Thus, monopoly results in a deadweight loss.